Xtract Resources has entered into a £980 000 subscription agreement with YA II EQ to provide additional working capital to further develop its Manica gold mine, in Mozambique.
Xtract chairperson Colin Bird reiterated that the company was now solely focused on its Manica project after having stopped investing in the Chepica gold/copper mine, in Chile.
The Manica mine, located 4 km north of Manica town, is currently in its bankable feasibility study phase, with production expected to start in April 2017.
The one-million-ounce mine is set to produce 48 000 oz/y of gold at a cash cost of $670/oz. It will have a mine life of ten years.
YA II EQ is subscribing for 3.5-billion new ordinary Xtract shares at 0.028p apiece. This represents about 19.4% of Xtract’s enlarged issued share capital.
On completion of the subscription, Xtract will initially retain £110 000 of the proceeds for general working capital purposes. The balance of £870 000 will be used to make the payment to the Investor under an equity swap agreement, which would see the investor make 12 monthly settlement payments of £72 500.
Capital expenditure at Manica is estimated to be around $28-million.
Source: Mining Weekly